Category Archives: Published Commentaries

Comment: Rep. Gara’s myopic view

Posted on July 7, 2013 | 2 comments

(Reprinted from the Juneau Empire, July 7, 2013)

AN OP-ED BY BRAD KEITHLEY

In a recent My Turn piece (“Answers to questions about the oil tax cut,” June 27, 2013), Rep. Les Gara argues that supporters of SB 21 are “spinning” facts. In fact, Rep. Gara is the one who has gone into full “spin” mode.

The real test of whether a change in tax policy is good or bad is its overall, long term revenue impact, not what it generates in a select number of years. By focusing only on the revenue levels estimated to be produced in the first few years, Rep. Gara argues that SB 21 is failed tax policy, when the full set of facts demonstrates otherwise. Continue reading →

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Posted in Published Commentaries

Alaska Oil Policy| Missing the Point (from the July 2013 Alaska Business Monthly)

Posted on July 4, 2013 | 2 comments

Alaska Business Monthly (July 2013)As noted on these pages previously, I write what began as a bi-monthly, and now is shifting to a monthly, column on oil, gas and fiscal policy issues for the Alaska Business Monthly.  This is the seventh column, originally published in the July 2013 print edition and available online here.

At the time this piece publishes, those seeking signatures on petitions to hold a referendum to overturn SB21, the governor’s oil tax reform bill, will be in the final days of their effort. If they succeed, a long campaign of more than a year will follow on the issue, with a vote scheduled for the August 2014 primary ballot. Continue reading →

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Posted in Published Commentaries, The Monthly Lead/Alaska Business Monthly

Alaska Oil Policy| Understanding Investment (the sixth in the Alaska Business Monthly Series, from the May 2013 edition)

Posted on April 30, 2013 | 1 comment

As noted on these pages previously, I write a bi-monthly column on oil & gas issues for the Alaska Business Monthly.  This is the sixth column, originally published in the May 2013 print edition and available online here.

Petoro Investment Cycle Slide 2Alaskans heard the word “investment” a great deal during the recent legislative session.  They likely will hear more of the word in the months and years ahead as the state continues efforts to bring increased investment to the North Slope, and others evaluate whether those efforts are successful.

In that context I thought it would be useful to write a column on oil investment.

The Chart

To do that, I have borrowed a chart from a company called Petoro.  Those who read my January column (“Alaska Oil Policy:  Achieving Alignment,” Alaska Business Monthly, Jan. 2013), will recognize Petoro as the arm of the Norwegian government engaged in co-investment with industry in the development of that country’s oil and gas resources.  I chose to use a chart from Petoro because it is viewed largely as a neutral entity, not likely to tilt the information playing field one direction or another. Continue reading →

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Posted in The Monthly Lead/Alaska Business Monthly, Thought Pieces

Alaska Oil Policy| “Maximum Benefit” (the fifth in the Alaska Business Monthly Series, from the March 2013 edition)

Posted on March 2, 2013 | Comments Off on Alaska Oil Policy| “Maximum Benefit” (the fifth in the Alaska Business Monthly Series, from the March 2013 edition)

Alaska Business Monthly (March 2013)As noted on these pages previously, I write a bi-monthly column on oil & gas issues for the Alaska Business Monthly.  This is the fifth column, originally published in the March 2013 print edition and available online here.

Article VIII, Section 2 of the Alaska Constitution requires that “[t]he legislature shall provide for the utilization, development, and conservation of all natural resources belonging to the State, including land and waters, for the maximum benefit of its people.”

As we have often heard during this legislative session, many read this provision as having significant relevance to the current oil tax debate, arguing that the provision requires the state to tax oil production at high rates in order to derive the “maximum benefit” from the oil for the state’s citizens. Continue reading →

Comments Off on Alaska Oil Policy| “Maximum Benefit” (the fifth in the Alaska Business Monthly Series, from the March 2013 edition)

Posted in Published Commentaries, The Monthly Lead/Alaska Business Monthly

The Fourth in the Alaska Business Monthly Series: “Alaska Oil Policy| Achieving Alignment” (from the January 2013 Alaska Business Monthly)

Posted on January 3, 2013 | 1 comment

January 2013 Alaska Business MonthlyAs noted on these pages previously, I write a bi-monthly column on oil & gas issues for the Alaska Business Monthly.  This is the fourth column, originally published in the January 2013 print edition and available online here.

The last column in this series (“Out of Alignment,” Alaska Business Monthly, November 2012) focused on the reasons why Alaska oil policy is misaligned with the objective of maximizing the development of the state’s oil and gas resources.

The column discussed the state’s attempted use of two tools—tax credits and direct regulatory intervention—to steer investment to Alaska and why those tools have failed to produce significant results in terms of increased production. As I explained, the state’s use of the tools has been similar to backseat driving—and just about as successful.

The column also briefly mentioned a potential solution to the state’s alignment problem—developing a means for the state to co-invest alongside industry in the development of the state’s oil and gas resources. This month’s column further explains that concept. Continue reading →

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Posted in Published Commentaries, The Monthly Lead/Alaska Business Monthly

The Third in the Alaska Business Monthly series: “Alaska Oil Policy| Out of Alignment” (from the November 2012 Alaska Business Monthly)

Posted on November 4, 2012 | 1 comment

As noted on these pages previously, recently I agreed to write a bi-monthly column on oil & gas issues for the Alaska Business Monthly.  This is the third column, originally published in the November 2012 print edition and available online here.

 As Alaska finishes this year’s election cycle and starts looking toward the coming legislative session there are several steps which are needed to restore Alaska as an attractive location for oil investment. Continue reading →

1 Comment

Posted in The Monthly Lead/Alaska Business Monthly, Thought Pieces

It’s time to cut state spending: The numbers show future has arrived

Posted on October 7, 2012 | 2 comments

(Reprinted from the Fairbanks News-Miner, October 7, 2012)

AN OP-ED BY BRAD KEITHLEY

James Carville is known for many things, but the one that always comes first to mind is the line he used to keep Bill Clinton on message during the 1992 presidential campaign. Carville summed up the campaign this way whenever Clinton threatened to wander off topic: “It’s the economy, stupid.” Clinton got the point and won the election.

A significant number of Alaska legislative candidates are in need of a similar mantra this coming election, except the appropriate theme this time should be “It’s the spending …” Continue reading →

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Posted in Published Commentaries, Thought Pieces

The Next in the Alaska Business Monthly series: “Oil Reform Requires Fiscal Reform” (from the September 2012 Alaska Business Monthly)

Posted on September 3, 2012 | 1 comment

Alaska Business Monthly (Sept 2012)As noted on these pages previously, recently I agreed to write a bi-monthly column on oil & gas issues for the Alaska Business Monthly.  This is the second column, originally published in the September 2012 print edition and available online here.  

Most Alaskans are familiar with efforts by Governor Parnell the last two years to reform Alaska’s current oil tax structure. The most recent effort ended earlier this year, when the Governor withdrew the revised oil tax reform bill that he had submitted at the beginning of the special legislative session.

What many are not aware of is something that happened at the end of the special session, immediately before the Governor withdrew the bill.

The Office of Management and Budget is the state agency responsible for preparing and administering the state budget. In an appearance before the House Resources Committee, the head of OMB, Karen Rehfeld, testified that if the Governor’s tax reform bill passed, the reduction in revenues could cause the state budget, which otherwise was projected by OMB to run a surplus for several more years, to turn to a deficit virtually immediately. Continue reading →

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Posted in Published Commentaries, The Monthly Lead/Alaska Business Monthly, Thought Pieces

Our Oil? Then it is Time for Our Investment

Posted on August 9, 2012 | 1 comment

(Reprinted from the Juneau Empire, Aug. 9, 2012; Alaska Business Monthly website, Aug. 9, 2012; Alaska Dispatch, Aug. 9, 2o12; Ketchikan Daily News, Weekend Ed. Aug. 11-12, 2012; Fairbanks News-Miner, Aug. 12, 2012)

AN OP-ED BY BRAD KEITHLEY AND REBECCA LOGAN

Alaskans are fond of saying “it’s our oil” when talking about the North Slope. Yet we as Alaskans have never invested in the development of “our oil.”

Instead, from the beginning of the North Slope oil era, Alaska has effectively outsourced responsibility for investing in the development of its oil to independent companies – the “producers.”

Under the lease form used since statehood, the producers have agreed to pay an up front bonus (the source of the $900 million received by Alaska in 1969) and bear the entire amount of the investment required to develop the lands. In exchange, the state contractually has agreed – since it is entirely the producers’ money – that the producers largely can set the pace and amount of subsequent investments they make once oil is discovered. Continue reading →

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Posted in Published Commentaries, Thought Pieces

Alaska Oil Tax Policy| Ships Passing in the Night (from the July 2012 Alaska Business Monthly)

Posted on July 16, 2012 | 3 comments

Recently, I agreed to write a bi-monthly column on oil & gas issues for the Alaska Business Monthly.  This is the first column, originally published in the July 2012 print edition and available online here.  

Alaska’s approach to oil and gas taxes has taken a number of twists and turns over the last several years. The latest twist may largely be the result of ships passing in the night.

Background

Shortly following her election in 2006, Gov. Sarah Palin proposed a set of changes to the then-existing tax structure. She termed the package “Alaska’s Clear and Equitable Share,” or “ACES.”ACES changed a previous package of modifications which had been enacted in 2006.

Although he supported ACES at the time it was passed, late in his campaign for his own term in 2010 Gov. Parnell began generally to talk about what he then termed as the need for “tweaks” in ACES. Following his election, Parnell proposed a set of changes, which was introduced in the Alaska House of Representatives and subsequently referred to as “HB 110.” Continue reading →

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Posted in Immediate Reactions, Reprints, The Monthly Lead/Alaska Business Monthly, Thought Pieces